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Dow tumbles 500 points after bond market flashes a recession warning (this warning has a perfect record for past 50 years at least)

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Here's what happened: The 10-year Treasury bond yield fell below 1.6% Wednesday morning, dropping just below the yield of the 2-year Treasury bond. It marked the first time since 2007 that 10-year bond yields fell below 2-year yields.

 

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That spooked Wall Street, because an inversion of the 2/10 curve has preceded every recession in modern history. That doesn't mean a recession is imminent, however: The Great Recession started two full years after the December 2005 yield-curve inversion.

 

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Here's what this all means: Normally, long-term bonds pay out more than short-term bonds because investors demand to be paid more to tie up their money for a long time. But that key "yield curve" inverted on Wednesday. That means investors are nervous about the near-term prospects for the US economy. Bonds and yields trade in opposite directions, so yields sink when investors buy bonds.

 

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Kinda want a recession so the housing market cools off and I can buy next year. 

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7 minutes ago, mclumber1 said:

Kinda want a recession so the housing market cools off and I can buy next year. 

This, butalso gimmie some inflation, because I have debt.

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Let's wish for the misfortune of millions so that we may personally benefit. Sorry you lost your job and now have to sell your house and move your family back in with your parents, but I'm here buy your house at a steal in this neighborhood!

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2 minutes ago, Dodger said:

Let's wish for the misfortune of millions so that we may personally benefit. Sorry you lost your job and now have to sell your house and move your family back in with your parents, but I'm here buy your house at a steal in this neighborhood!

 

The housing market is too hot right now, driving up prices higher than they reasonably should be.  

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Just now, Dodger said:

Let's wish for the misfortune of millions so that we may personally benefit. Sorry you lost your job and now have to sell your house and move your family back in with your parents, but I'm here buy your house at a steal in this neighborhood!

Now you get it

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Just now, mclumber1 said:

 

The housing market is too hot right now, driving up prices higher than they reasonably should be.  

Build, baby, build! YIMBY

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I have a solution to "cooling off" the housing market, but everyone (justifiably) hates it: phased elimination of the mortgage interest tax deduction.

 

It's part of my goal to "de-leverage" the economy as a whole by eliminating all tax benefits associated with debt interest.

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7 minutes ago, SFLUFAN said:

I have a solution to "cooling off" the housing market, but everyone (justifiably) hates it: phased elimination of the mortgage interest tax deduction.

 

It's part of my goal to "de-leverage" the economy as a whole by eliminating all tax benefits associated with debt interest.

 

I mean selfishly I hate it, curious to see how much it helps out when I do my taxes next year.

 

But from a practical standpoint I'm fine with it. 

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11 minutes ago, SFLUFAN said:

I have a solution to "cooling off" the housing market, but everyone (justifiably) hates it: phased elimination of the mortgage interest tax deduction.

 

It's part of my goal to "de-leverage" the economy as a whole by eliminating all tax benefits associated with debt interest.

It's effectively dead now. It has an upper limit of 750k for new loans, and for the mortgage deduction to be greater than the standard deduction, you basically need to be in your first couple of years of about a 500k loan at 5.25% (assuming no other deductions taken)

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22 minutes ago, Dodger said:

Let's wish for the misfortune of millions so that we may personally benefit. Sorry you lost your job and now have to sell your house and move your family back in with your parents, but I'm here buy your house at a steal in this neighborhood!

 

How do you think rich people make their money? My cousin's wealthy husband went BANANAS in the 2008-2010 timeline buying up apartment buildings in Jersey City.

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Just now, Jose said:

 

How do you think rich people make their money? My cousin's wealthy husband went BANANAS in the 2008-2010 timeline buying up apartment houses in Jersey City.

 

 

So we just need to be already rich enough to buy investment property, and then buy it a bargain when the next recession hits. I need to get on this plan. 

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3 minutes ago, Jose said:

 

How do you think rich people make their money? My cousin's wealthy husband went BANANAS in the 2008-2010 timeline buying up apartment buildings in Jersey City.

 

The money is in the banana stand

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2 hours ago, osxmatt said:

This will make the 2020 election extra spicy!

 

This. Nothing pisses off people more about a president's performance than an ol' fashioned recession!

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6 minutes ago, Dodger said:

 

 

So we just need to be already rich enough to buy investment property, and then buy it a bargain when the next recession hits. I need to get on this plan. 

 

It's funny to me that fiscal conservatives will tell you that the government spending money during a recession is a terrible idea, yet that's exactly what these fuckers do with their personal finances.

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i'm ready to weather the storm but im getting ready to sell my house and buy within the next few months.

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1 hour ago, Dodger said:

Let's wish for the misfortune of millions so that we may personally benefit. Sorry you lost your job and now have to sell your house and move your family back in with your parents, but I'm here buy your house at a steal in this neighborhood!

That's pretty much what the 1% has been doing for decades

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30 minutes ago, marioandsonic said:

That's pretty much what the 1% has been doing for decades

 

 

Yes but this isn't a board for millionaires to come together and laugh at the poor we're screwing over while we debate over which one of us has the nicest Ferrari.

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7 minutes ago, Dodger said:

 

 

Yes but this isn't a board for millionaires to come together and laugh at the poor we're screwing over while we debate over which one of us has the nicest Ferrari.

 

 

Well if you wouldn't say it out loud, maybe we could lure one in, bash his head in, and take his Ferrari!

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12 minutes ago, CayceG said:

"Honk Kong is not helping"

 

Yikes. 

 

I'm disappointed that "Honk Kong" isn't in the actual tweet.

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2 minutes ago, b_m_b_m_b_m said:

CRAZY INVERTED YIELD CURVE

 

 

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15 hours ago, Dodger said:

 

 

So we just need to be already rich enough to buy investment property, and then buy it a bargain when the next recession hits. I need to get on this plan. 

If you've got/can get the the money, it certainly doesn't hurt. 

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On 8/14/2019 at 12:54 PM, Reputator said:

 

This. Nothing pisses off people more about a president's performance than an ol' fashioned recession!

Thanks, Hillary!

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21 minutes ago, TheGreatGamble said:

"As others falter, we will get stronger"...

 

Ugh, pretty sure thats not how the world economy works. 

 

 

He's subscribing to the well known theory of economics known as Highlanderism.

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